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London 2012: No Olympic boost to London’s tourism industry this year? Pity

Six weeks before the opening ceremony, it looks like the boost in tourism the summer Olympic Games were supposed to provide to London won’t materialize.

Instead of filling the city with tourists, high hotel prices and concerns about overcrowding have combined to keep non-Olympic visitors away, meaning London isn’t likely to see a net increase in tourists during the games.

Hotel room pricing remains a big problem as the games approach.

Seven years ago London’s Olympic organizing committee booked 40,000 hotel rooms in anticipation of an influx of Olympic officials and their families. In response local hotel operators raised the prices of remaining hotel rooms, but in January the organizing committee returned nearly 10,000 rooms to hotels and operators have been hustling to fill them since then.

While the Financial Times reports that since January the average price for a hotel room in London has fallen nearly 10 pounds to 202 pounds per night, July and August bookings there are down more than 30 percent compared with last summer.

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“There is a tragic irony in the numbers we are seeing,” said Mario Bodini, chief executive of the hotel room wholesaler JacTravel in an interview with the Financial Times. “London will be a fantastic place to visit in July and August. It is a time when the place should be heaving, but instead it is likely to be comparatively empty.”

While the glut of hotel rooms created by the Organizing committee’s decision contributes to the low occupancy rate, so does the widespread perception that a critical mass of Olympic tourists will make London an unpleasant place to visit during the games.

So instead of Olympic crowds joining with other tourists to produce a windfall for London’s tourism industry, vacationers with no interest in the Games are heading to places far from the games.

“A lot of the agents overseas that would naturally feature the UK in their programmes just have not done so,” said travel agency director John Martin in an interview with Sky News. “The demand has moved not to other regions of the UK but to other countries in Europe.”

The Wall Street Journal reported about 30.7 million overseas visits to Britain are expected this year – the same as last year. Visitor spending is also expected to be unchanged at $27.7 billion US.

But even if the Olympics can’t increase a London’s overall number of visitors this summer, they can still provide a comprehensive marketing opportunity that will pay off in following years.

“You’re getting massive exposure for your city everywhere on the planet,” says Bob Richardson, chief operating officer of Toronto’s bid for the 2008 Olympics and a member of the group that bid successfully for the 2015 Pan Am Games. “If you asked folks in Barcelona (host of the 1992 games) was it positive or negative for them for tourism they’ll tell you unequivocally it was hugely positive over a longer period.”

With Toronto set to host the Pan Am Games in 2015, people like Richardson are watching London’s tourist dilemma closely.

And while they expect Toronto to enjoy a similar long-term improvement in tourism – especially from countries in Latin America that follow the Pan Am Games closely – Richardson isn’t worried about a London-style drag on tourism during the event.

If anything, he says, Toronto will see more tourists during Pan Am since the Games probably won’t draw big enough crowds to squeeze other tourists out of town.

“There’ll be some net gains of people coming and over the long term it’s a net positive,” he says. “But it’s not going to scare people away.”

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